Production expansion business agreement with the Saudi government
An interpretation of the start of the ‘Bin Salman effect’ in the industry
Hyundai Motor Company has signed a memorandum of understanding (MOU) with the government of Saudi Arabia to expand car production in Saudi Arabia. In November last year, Chung Eui-sun, chairman of Hyundai Motor Group, met with heads of other domestic conglomerates when Saudi Crown Prince Mohammed bin Salman visited Korea. There is also an interpretation that the ‘Bin Salman effect’ started about a month after visiting Korea.
Saudi Arabia’s Ministry of Industry and Mineral Resources announced on its official Twitter account on the 31st of last month (local time) that “the Minister of Industry and Mineral Resources and the Minister of Economic Planning participated together and signed a Memorandum Understanding with Hyundai Motor Company to promote car production.” Hyundai Motor Group also confirmed the signing of the MoU on the 1st.
With this MoU, there are observations that Hyundai Motor will build the first car manufacturing plant in the Middle East in Saudi Arabia.
Argam, a Saudi media outlet, reported that Saudi Arabia and Hyundai Motor Company plan to set up an electric car and internal combustion engine plant in a semi-assembled (CKD) product mode. It is expected that the headquarters of the factory will be established in Saudi Arabia.
Saudi Arabia’s state-run SPA news agency assessed that this MoU is an extension of ‘Vision 2030’ to diversify the Saudi economic base. Vision 2030 is Saudi Arabia’s plan to transform its oil-centric economy. The core project is the construction of ‘NEOM City’, which promotes a new eco-friendly city in the future.
An industry insider said, “This MoU is at the level where we can start discussing what we can do in the future.
